Wynn Resorts And MGM Are In Early Talks About Possible Sale Of Encore Casino

The Encore Boston Harbor Casino in Everett is seen from Somerville. (Jesse Costa/WBUR)

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Originally published on May 17, 2019 7:14 pm

Wynn Resorts is in early talks to sell the Everett casino for which it fought so hard to retain control, a striking pivot five weeks before the venue’s scheduled opening.

The prospective buyer is MGM Resorts, which already operates a casino in Springfield. Wynn and MGM said in a joint statement Friday afternoon that negotiations have taken place “over the past several weeks.”

After Massachusetts Gaming Commission investigators concluded that Wynn Resorts mishandled sexual misconduct allegations against its former chief executive, Steve Wynn, the commission ruled on April 30 that the company remains “suitable” to hold the lone Greater Boston casino license.

The commission ordered Wynn Resorts to pay a $35 million fine and imposed other conditions on the company.

Wynn and MGM said in their statement that talks, first reported by the Boston Globe, are “very preliminary and of the nature that publicly traded corporations like ours often engage in.”

The companies added:

In fact, when opportunities such as this are presented, we are required to explore. We cannot say today where these conversations will lead; however, we can reaffirm our commitment to the communities where we operate today.

The people of Springfield and Everett welcomed us into their neighborhoods. We know that is a privilege, and we take it seriously. Our conversations will not impact the jobs at our facilities and will not impact the opening of Encore Boston Harbor. Regardless of where this leads us, we will ensure that our commitments will be met, and that those who welcomed us into their communities will not be disappointed.

Gaming commission spokeswoman Elaine Driscoll said in a statement that “the commission’s written decision stands. The deadline for fine payment and notice of appeal is May 31. The MGC continues to focus its efforts on the significant amount of regulatory preparations required before Encore’s opening.”

The rules for casinos in Massachusetts prohibit any single company from holding more than one casino license. It remains unclear what might happen to MGM’s Springfield facility if the company goes through with a purchase of Encore.

“They are running into a lot more competition from Connecticut and Rhode Island, so maybe they are thinking, maybe we will get out of Springfield and we will do anything to make a bigger splash in the Boston area,” says Richard McGowan, associate professor at Boston College and author of the book “The Gambling Debate.”

A change in ownership could impact both host communities.

“They’ve done everything we’ve asked them to do,” Springfield City Council President Justin Hurst told New England Public Radio. “If they’re taking their talents elsewhere, that certainly will be a blow to the city of Springfield.”

Everett City Councilor Michael McLaughlin said he, too, is alarmed.

“The people of Everett voted almost 90% in favor of Wynn Resorts coming into Everett, not another developer,” he said. “So I would definitely like to have the community be informed as quickly and efficiently as possible.”

In a statement, Everett Mayor Carlo DeMaria added that he “had the foresight” to include a provision in the city’s agreement with Wynn Resorts “that states, ‘Neither Wynn nor the City shall transfer or assign its rights or obligations under this Agreement without prior written authorization of the other party.’”

The Massachusetts Gaming Commission did, however, slap a $35 million fine on Wynn Resorts. That’s $15 million more than what Nevada regulators handed down earlier this year for essentially the same violations.

Wynn Resorts mishandled sexual misconduct allegations against founder Steve Wynn, then concealed the accusations from Massachusetts regulators when seeking one of the state’s coveted casino licenses, according to a report by investigators for the Massachusetts Gaming Commission.

The roughly $2.5 billion resort casino rising from the banks of the Mystic River in Everett, Massachusetts, will no longer carry the Wynn name. The change was announced Friday by the chief executive of Wynn Resorts as the company argued that disgraced founder Steve Wynn no longer has any ties to the project or company.